Options Strategy Picker

Which option strategy fits what you expect

A bull call spread, a straddle and an iron condor each pay off in a different kind of market. This picker takes your view, where the price will be at expiry and whether it will move more or less than the options imply, builds the best strikes for each standard strategy, and ranks them by expected profit, chance of profit or return on risk. Every option is priced with Black-Scholes at the market implied volatility, the same for every strike. For one option or one position you already hold, use the Black-Scholes calculator or the options profit calculator.

How it works

Your view is a lognormal price at expiry: its mean is your expected price and its volatility is your own forecast, which defaults to the market's. For a strategy with legs at strikes K, the profit at expiry is piecewise linear, so the maximum profit, maximum loss and breakevens sit at the strikes or at a price of zero. The expected profit is the average of that payoff under your view, computed from the Black formula for each leg:

• Call: F × N(d1) − K × N(d2)
• Put: K × N(−d2) − F × N(−d1)
• d1 = (ln(F/K) + s²/2) / s, d2 = d1 − s, s = forecast vol × √T, F = expected price

The chance of profit is the probability under the same distribution that the price lands where the payoff is above zero. Strikes come from a grid of round numbers around the price, and for each family the strikes with the best ranking value are kept. Butterflies and condors use equal wing widths. The grid spans your price and target widened by one and a half standard deviations, so a winner that sits at the edge of the grid (a deep in-the-money call, say) means the best strike for that family lies further out than the search goes. Some strategies have the same payoff by put-call parity (a long call and a protective put, a bull call spread and a bull put spread), so they can show identical numbers.

Worked example

Price 100, expected price 110, 30 days, market volatility 30%, your volatility 35%, rate 0, ranked by expected profit:

• Long call at strike 90, premium 10.43 (the protective put at 90 ranks level with it, by put-call parity)
• Expected profit 9.65, chance of profit 80.4%
• Maximum loss 10.43, breakeven 100.43, profit unlimited

Ranked by return on risk instead, a call at strike 125 for 0.01 comes first: a tiny loss against a small chance of a big win. That is why the key is a choice and not a verdict.

What it assumes

One volatility prices every strike, so there is no skew and no smile. No dividends, no early exercise, no commissions or bid-ask spread. Premiums are not discounted, and a covered call and a protective put include the share bought at the current price. Figures are per one share or coin, so multiply by the contract size. Strategies with unlimited loss (naked short call, short straddle, short strangle) are left out unless you switch them on. The ranking is only as good as your forecast. The expected profit, chance of profit, breakevens and limits were checked against an independent Python implementation using numerical integration.

Where to go next

Test how likely the price is to touch a level with the barrier touch calculator, or read the implied volatility from an option price with the implied volatility calculator.

Use via API or MCP

This calculation is available as a deterministic API call: useful for bots or AI agents that need strategies ranked for a forecast with exact limits and breakevens.